The August Newsletter: Competing Values

I recently visited a fast-growing, Fortune 100 company.  On my visit, the CEO gave a brief history of the firm.  The organization began as a place of pure financial transactions where the executives were narrowly focused on profit. The result of this single focus was that employees and customers were treated coldly and the company began to suffer.  It became necessary to see employees and customers in a new way, as valued assets.  Fast growth followed but a new problem emerged.  In the huge company simple mistakes were costing millions of dollars.  It became necessary to focus on precision, predictability and cost control.  The shift made a positive difference but also created a new problem.  The increasingly bureaucratic company was far from the cutting edge of the market place.  There was a need to become innovative.  The CEO shared how difficult it is to find leaders who can focus on profit and people, and control and innovation… all at the same time.

Interestingly, in a meeting just before the one with the CEO, his direct reports described the same journey, not for the company, but for the CEO.  They talked about how he had moved from an original focus on profit, to a concern for people, then to a concern for precision, and then a concern for innovation.  As the company evolved, he was required to become a more complex leader.

This account perfectly reflects a model called the Competing Values Framework.  It emerged in the 1980s.  In our research we were trying to understand what made an organization effective.  Our primary discovery was that the values that humans pursue in an organization can be seen as competing.   Consider some of the following examples from a diagram in the book The Positive Organization.  In most organizations there is an emphasis either on Individual Accountability or Cohesive Teamwork; Decisive Action or Group Deliberation; Cost Control or Growth Focus; Organizational Predictability or Self-Organizing Processes, etc.  Each set of values could be described as a positive opposite.  We use the word positive because both values are good–and opposites because they represent behaviors or ideas that most people think are in direct contrast to each other.  It is not clear for example how you would focus on both growth and cost control.  You can see some of the values in this diagram:

 We discovered something else.   Unless a leader can see competing values as complementary, the values in the framework–which are all positive–tend to turn negative.  Full engagement becomes exhaustion.  Individual accountability becomes conflict.  Decisive action becomes exclusion.  Achievement focus becomes self-interest.  Constructive confrontation becomes abrasiveness.

The above CEO originally had a narrow (simple) view, focusing only on a few values having to do with profit.  He grew into a more mature (complex) view.  He was seeing dynamic tensions that needed to be appreciated and integrated.  He told us that his greatest need was to develop a cadre of creative leaders who could see and appreciate the dynamic whole.  Unless he did, the rapid growth of his company would be in danger.

As leaders mature, they come to understand what this man now understands.  An organization is not just a stable hierarchy where managers solve technical problems.  It is also an organic network comprised of dynamic tensions.  For the people to prosper and exceed expectations, an organization must have leaders who can constantly integrate tensions and turn conflicts into creative collaboration.  The competing values framework articulates some of the central challenges at the heart of positive organizing.

This month’s newsletter invites you to consider the values that you appreciate and the ones that you undervalue.  Take some time to see how you can integrate concepts that seem to be opposed, and think about how to widen your focus and create a more positive organization.